The FCA has written to at least five advice firms to review their compliance with anti-money laundering rules, Money Marketing has learned.
One advice firm recently had a half day visit from the FCA, Money Marketing understands, as the regulator asks firms to talk through their processes to make sure they are compliant with the rules.
The review has included at least one firm that is a sole trader, and has asked for two years of anti-money laundering reports from another firm’s anti-money laundering officer, according to a source familiar with the FCA’s work.
Another source noted that the FCA also wanted to confirm who was the designated money laundering officer at firms, and is attempting to arrange some meetings with them.
The FCA is currently consulting on how to implement the Fourth Money Laundering Directive. This will require firms to identify and make risk assessments over how money laundering and terrorist financing could affect their business, while the register of politically exposed persons is also set to be updated to include UK-based individuals.
Compliance and Training Solutions director Mel Holman says: “What checks smaller firms were doing against the sanctions list has been in place forever, it was from HMRC, but there was no specific rule in the FCA handbook…Smaller firms, specifically sole traders, could get caught out on the PEPs register; most firms implement checks when they first take on a client, but how often do they re-check?”
The FCA says that the work was part of its regular, proactive supervision activities, and is being conducted with a random sample of firms that is not specifically focused on IFAs.
Last year, the FCA fined the UK arm of Bangladesh-based bank Sonali £3,250,600 for failing to have adequate anti-money laundering systems in place over a four-year period.